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Non-Tech : Datek Brokerage $9.95 a trade
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To: Robert V. Cavaleri who wrote (10720)1/4/1999 3:28:00 PM
From: pae  Read Replies (2) of 16892
 
Robert, re maintenance calls:

Not an expert, but it may help to know that 2 margin numbers apply to each stock: marginable percentage and maintenence percentage. Typical I believe is 50/30. The broker will extend 50% margin based on stocks value and make a maintenance call when the value shrinks below 30%. Schwab has been making margin%=maint% for the internuts both equal to 50%. Datek just makes them un-marginable. Looks like AMZN is no longer NS.

A crude example of my understanding of maint calls (which someone will brutally correct if wrong in the slightest detail <g>):

100 shares of X per share price $100. Only item in account.
available buying power 10000.
buy 100 more shares of X. Now at 50% margin, can't buy more.
Real cash balance: -10000.
price drops 10%. value of equity= 200*90 = 18000
              plus real cash 18000-10000 =  8000 = account value
                              8000/18000 =    44% equity percent
Still can't buy more, but margin call not yet.
price drops to 71. value of equity = 200*71= 14200
               plus real cash 14200-10000=  4200 = account value
                               4200/14200=   29.5% below maint
                                                   expect call

Might be wise to look at Datek's online documentation to get a better/official idea of Datek's procedures.

Regards,
pae

EDIT: check out datek.com
Neat graph at the bottom does a better job than I did. Cheers!
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